Beer Gives Model for Legal Canada Marijuana, Sleeman Says

By Greg Quinn -
Nov 6, 2013

Canada could use the beer industry as
a model if it ever decides to legalize and tax marijuana,
according to the founder of the nation’s third-largest brewer.

John Sleeman of Sleeman Breweries Ltd. said rules imposed
after Prohibition transformed a crime-ridden industry into one
that pays high taxes, helps battle social problems such as drunk
driving and accounts for almost 1 percentage point of gross
domestic product. While not advocating the move, he said in an
interview in the Bloomberg News Ottawa bureau that the model
could be applied to pot.

“It’s not unlike Prohibition where you had people making
money and the government finally said: ‘Hey wait a minute, we
have to clean this up,’” said Sleeman, the head of a national
beer lobby group whose family smuggled alcohol into the U.S.
when it was banned in the 1920s and 1930s. “I can see some time
down the road the Canadian government will use parts of how
we’re regulated as a way to base the regulation for the
production and sale of marijuana.”

Canadians may be warming to the idea of legal weed. Prime
Minister Stephen Harper said in August he would consider a
proposal to allow police to write a fine for possession rather
than press charges. Liberal Party Leader Justin Trudeau said he
used the drug while a parliamentarian. The federal government is
licensing companies to grow and distribute medical pot.

Provincial bodies, such as the Liquor Control Board of
Ontario with its network of government-owned stores, could also
guide any marijuana framework, Sleeman said.

Smuggling, Tax-Evasion

The Sleeman family began brewing beer in Guelph, Ontario in
1851. Sleeman revived the company in 1988 after it was shut down
for 50 years after facing Prohibition-era smuggling and tax
evasion charges. The brewer, which counts Al Capone as a former
customer, uses its colorful history in advertisements.

Sleeman, in Ottawa to promote a Conference Board of Canada
report on the industry’s economic contribution, was due to meet
Harper yesterday to discuss beer taxes, which he said are the
world’s second-highest after Norway. For every dollar Canadians
spend on beer, 44 cents goes to the government, for an annual
average of C$5.8 billion ($5.6 billion) from 2009 to 2011,
according to the report.

Marijuana is more potent than alcohol, said Beer Canada
President Luke Harford. The lobby group represents 26 companies
accounting for 90 percent of Canada’s production, including
Sleeman’s namesake producer bought by Japan’s Sapporo Holdings
Ltd. (2501) in 2006.

A good thing “about the conversation that’s taking place
now is the scrutiny that has been put onto beverage alcohol will
now be applied to marijuana,” said Harford, who also attended
the interview. “There is a perception out there that it’s
benign, has no impact. But it has a massive impact on young
people in particular.”

The government should keep beer taxes at a level where
people can afford the product, Sleeman said, adding high taxes
are leading some consumers to buy 12-packs instead of cases of
24, he said.

Is he tempted by pot’s potentially higher profits? “John
Sleeman won’t be getting in the business of growing marijuana.”